CAIB 1 definitions Verified Exam Questions and
Answers 2026/2027
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Terms in this set (78)
Risk(1) Chance of financial loss to which an object of
insurance is exposed
Speculative Risk(1) Involves the possibility of either financial loss or gain
Pure Risk(1) The chance of financial loss but no chance of financial
gain
, Insurance(1) The undertaking by one person to indemnify another
person against loss
To pay a sum of money or other thing of value upon
the happening of a certain event
Contract(1) An agreement between two or more persons which
creates an obligation to do or not to do a particular
thing
Consideration(1) An exchange of something of value between the
parties
Insurable Interest(1) When a party is able to show that they would suffer
financially by a loss
Insurance Binder(1) A temporary agreement in which the insurer agrees to
provide certain coverages pending the issuance of
the policy
Utmost Good Faith(1) The law requires insurance contracts maintain a higher
standard of honesty that is needed of other contracts
(This applies to the insured the insured and the broker)
Indemnity(1) Application of the principle of indemnity ensures
people receive the actual amount of their loss, no
more and no less
Agency Agreement(1) A written agreement or contract between the insurer
and the Brokerage which acknowledges their
relationship
(Provides the Brokerage with the authority to bind the
insurer for certain classes of risk and limits)
Answers 2026/2027
Play your way to mastery with fun games
Match Blocks Charms NEW
Terms in this set (78)
Risk(1) Chance of financial loss to which an object of
insurance is exposed
Speculative Risk(1) Involves the possibility of either financial loss or gain
Pure Risk(1) The chance of financial loss but no chance of financial
gain
, Insurance(1) The undertaking by one person to indemnify another
person against loss
To pay a sum of money or other thing of value upon
the happening of a certain event
Contract(1) An agreement between two or more persons which
creates an obligation to do or not to do a particular
thing
Consideration(1) An exchange of something of value between the
parties
Insurable Interest(1) When a party is able to show that they would suffer
financially by a loss
Insurance Binder(1) A temporary agreement in which the insurer agrees to
provide certain coverages pending the issuance of
the policy
Utmost Good Faith(1) The law requires insurance contracts maintain a higher
standard of honesty that is needed of other contracts
(This applies to the insured the insured and the broker)
Indemnity(1) Application of the principle of indemnity ensures
people receive the actual amount of their loss, no
more and no less
Agency Agreement(1) A written agreement or contract between the insurer
and the Brokerage which acknowledges their
relationship
(Provides the Brokerage with the authority to bind the
insurer for certain classes of risk and limits)
